Anyone who wants to do business in Russia has to be prepared for anything. Because of Russia’s war of aggression against Ukraine, many Western companies have announced a withdrawal. The Austrian Raiffeisen Bank International (RBI) is also one of them. However, the planned exit of the second largest financial institution in Austria is likely to be made significantly more difficult by a decision from a Russian court. According to this, the bank was banned by an interim order from selling its Russian subsidiary to potential buyers. As RBI announced on Thursday evening, the management is sticking to its plan to reduce business in Russia. Due to the court’s restriction on disposal, it is currently not legally possible for the financial institution to transfer shares from the Russian subsidiary and thus sell shares. The operational business of Raiffeisenbank Russia is unaffected and other property rights are not affected, the spokesman explained. The board says RBI will use all legal means to reverse the court decision. However, this will make the sales process more difficult and “inevitably lead to delays.” Investors in the leading institution of the Raiffeisenlandesbanken reacted nervously to the decision. The share price fell by almost six percent on Friday and was trading at around 17 euros. Erste Group’s capital market experts believe that the chances of Raiffeisen’s exit from Russia in the near future are significantly reduced. However, this does not change the valuation of RBI shares, commented expert Thomas Unger. In his valuation model, the valuation of the businesses in Russia and Belarus is already zero. The background to the decision is a court case brought by Rasperia Trading Limited, which until recently was controlled by the Russian oligarch and investor Oleg Deripaska, against the Austrian construction company Strabag and its Austrian core shareholders. Although RBI is not a party to the proceedings, Raiffeisenbank Russia is named in the lawsuit as being connected to the other defendants. RBI’s options for action with regard to its Russian business are therefore further limited until further notice. CEO Johann Strobl recently brought up a partial sale, and in the past a spin-off was also mentioned as an option. The attempt to get frozen funds out of the country using a complex transaction failed at the beginning of May. The shares in Strabag originally held by Deripaska were to be acquired by the Russian RBI subsidiary and then flowed to the parent company as a dividend in kind. The delay in RBI’s withdrawal through legal proceedings is reminiscent of the case of the VW Group, whose assets in Russia were March last year were also confiscated by order of a Russian court. Volkswagen had been trying to find a buyer for its Russian assets since Russia’s attack on Ukraine in spring 2022. Back then, too, the lawsuit came from a company with a connection to Oleg Deripaska, namely the Russian car manufacturer GAZ, which belongs to Deripaska’s holding company and was VW’s manufacturing partner until spring 2022. The move was widely seen as an attempt to drive down the price of VW’s assets. Volkswagen ultimately sold it for a fraction of the actual value to a financial holding company backed by one of Russia’s largest car dealers. In the case of the RBI, Russia could have another interest in delaying the withdrawal. It is by far the largest foreign bank in the country (ahead of Italy’s Unicredit and Hungary’s OTP) and one of the few that are not cut off from the international payment system Swift or under sanctions. This has made it an important channel for global financial transactions for many companies and private customers. However, the RBI has now stopped transfers in dollars and euros for private customers. However, the bank recently announced that corporate customers in non-sanctioned sectors could continue to rely on RBI services. More on the subject The fact that many Russians see it as a “safe haven” for their savings is also reflected in the good results of the past few months. Although the bank has worsened the conditions for its Russian customers as part of the gradual withdrawal and offers lower interest rates than other Russian institutions, more than half of the Vienna-based RBI’s global profit in the first six months of this year came from business in Russia and Belarus. No dividends flow to Vienna.
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